Last week, I was proud to help pass bipartisan legislation in the House to stop Secretary of Education Betsy DeVos from implementing a new policy – set to apply at the end of June – that would weaken protections for students targeted by predatory for-profit colleges. As we work to expand a wide range of affordable educational opportunities for students including apprenticeship, vocational, and job training programs, we must ensure young Granite Staters who pursue higher-education are not saddled with thousands of dollars in debt by institutions engaged in deceptive and misleading practices.
Many students who attended Daniel Webster College know first-hand why there is an urgent need for this legislation. Thousands of students in Nashua received a top-notch education at DWC – a cornerstone of the local community for many decades – before it was purchased in 2009 by ITT Tech, a large network of for-profit colleges.
ITT Tech engaged in predatory practices and exploited students’ desire to strive for a bright future through a college education. In a recently settled lawsuit brought by the New Hampshire Department of Justice and 42 other states, it is alleged that ITT Tech, “threatened to expel students if they did not accept [high interest rate] loans”
from private lenders. Thousands of students took out federal student loans to help pay for their education at DWC. After receiving payment from students, ITT Tech passed those funds along to its shareholders rather than investing it in the education of students. In 2016, the Department of Education prohibited ITT Tech from using federal student loans as a source of financing and the institution collapsed soon after.
Under the Obama Administration, the Department of Education quickly responded to the crisis caused by collapsing for-profit colleges and issued the Borrower Defense Rule to simplify the process for students seeking federal loan forgiveness after being defrauded by their school.
As of December 2019, more than 550 defrauded Granite State students experienced loan relief and nearly 450 are currently in the process of addressing their federal student debt under the Obama Administration’s Borrower Defense Rule.
Secretary DeVos is working to roll back this rule by replacing it with her own proposal that would put the interests of private, predatory colleges ahead of New Hampshire students. Her Education Department’s regulation stacks the deck against students by limiting the amount of time victims of fraud have to file claims for relief and by implementing overly burdensome legal standards that most students will need a lawyer to navigate. The new regulation also limits accountability for predatory colleges, which means taxpayers and students will be responsible for dealing with the aftermath of the next ITT Tech. An independent analysis found that this new rule will decrease student debt discharges significantly – under the Obama Era rule, analysts found that 53% of eligible debt would be discharged, but under this new rule, only 3% of students who have been defrauded are expected to find relief.
The bipartisan legislation that we passed in the House last week will prevent the Department of Education from implementing DeVos’ misguided rule and it will leave in place the existing Borrower Defense Rule. At a time of intense partisanship in Washington, the vote last week was an important example of Republicans and Democrats working together to help protect American students. I urge the Senate to pass this legislation quickly to protect students from institutions that put profits and shareholders ahead of a quality education.